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Please respond to the following questions regarding the Gemini Electronics. 1) Prepare cash flow statements for each year 2008 and 2009. (Note: the equity account

Please respond to the following questions regarding the Gemini Electronics.

1) Prepare cash flow statements for each year 2008 and 2009. (Note: the equity account would change each year by net income earned for the year less dividends paid plus proceeds from shares issued. You may assume the firm did not issue new shares either year. Net income for the year is captured at the beginning of the cash flow statement. Dividends paid should be included in the statement as a financing activity.)

2) Calculate the asset management, profitability, debt management, and liquidity ratios we reviewed in class for each of the past three years.

3) Prepare common-size income statements and balance sheets for each of the past three years.

4) Based on the analyses completed above, evaluate Geminis financial health How well has the company been performing? What concerns, if any, do you have about the firm? What recommendations would you make?

GEMINI ELECTRONICS LTD.

INCOME STATEMENT

2007

2008

2009

Sales

8,671,715,000

12,175,476,500

13,664,714,160

Cost of Goods Sold

5,032,513,200

7,886,796,000

8,974,149,576

Gross Profit

3,639,201,800

4,288,680,500

4,690,564,584

Operating Costs

Selling and Distribution

854,300,000

934,532,230

1,001,234,530

R&D

365,660,340

476,350,230

785,774,340

Administration

832,740,300

999,453,230

980,340,500

Amortization

187,929,165

288,216,088

394,440,051

Operating Profit

1,398,571,995

1,590,128,722

1,528,775,163

Interest

288,898,584

277,686,944

329,923,700

Earnings Before Taxes

1,109,673,411

1,312,441,778

1,198,851,462

Taxes

388,385,694

459,354,622

419,598,012

Net Income

721,287,717

853,087,156

779,253,450

GEMINI ELECTRONICS LTD.

BALANCE SHEET

Cash

1,437,227,573

1,366,526,361

1,413,474,400

A/R

1,201,094,250

1,328,523,975

1,503,560,340

Parts Inventory

960,875,400

1,062,819,180

1,201,345,530

WIP Inventory

66,650,675

75,640,210

89,575,400

Finished Goods Inventory

1,451,230,215

1,605,660,505

1,805,340,520

Total Current Assets

5,117,078,113

5,439,170,231

6,013,296,190

L,P,& E, Net

1,317,388,220

2,281,077,095

3,363,891,508

Intangibles

561,903,428

601,083,781

580,509,006

Total Assets

6,996,369,761

8,321,331,107

9,957,696,704

A/P

1,305,530,320

1,509,430,300

1,564,430,450

Current Portion of LT Debt

607,184,919

651,847,287

785,532,620

Total Current Liabilities

1,912,715,239

2,161,277,587

2,349,963,070

Long-term Debt

3,035,924,595

3,259,236,437

3,927,663,101

Shareholders Equity

2,047,729,927

2,900,817,082

3,680,070,533

Total Liabilities and Equities

6,996,369,761

8,321,331,107

9,957,696,704

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